This piece is from a PhD who generously shares his PEI and case interview experience which finished just a few days ago.

I interviewed just a few days ago as an experienced hire and the memory is still fresh in my mind. Michael encouraged me to share my experiences before I move onto the next interview with BCG.

Michael wanted me to share my experiences interviewing in the US so readers could benchmark themselves.

1^st PEI: Tell me about the company you started? If a VC gave you $30M dollars, what would you do? If you had a choice to live anywhere in the world and do anything, where would you go and what would you do? Tell me about a time where you worked in a team and overcame a challenge.

1^st PEI Response

We started talking about basketball as it was shared interest and he talked about his favorite team

The startup was to make a product for the market, but the market was not big enough to sustain this single product.

If a VC gave me $30 million dollars, I would start a business. I then mentioned the latest McKinsey Quarterly article that mentioned that the three main areas for business concerns are an aging population, importance of developing economies, and tech interruption. So I would choose from those three areas and narrow down on the aging population. I then broke down the business ideas into Health, Services, or Interests of the aging population and gave ideas for Health and Services. Then I forgot what the 3^rd area was and couldn’t brainstorm, as I wasn’t writing things down during my brainstorm.

If I could go anywhere, I would choose a developing Economy due to their importance as mentioned in the McKinsey Quarterly article. I would choose Asia due to the growth of China, but would pick Singapore due to the openness compared to China. I would be a management consultant in Singapore.

Interviewer responded: why are you coming to this office then? I responded that I would first have to learn to be a management consultant and going directly to Singapore would not set me up for success right away as I would have to learn both the business culture and management consulting.

I told him a PEI story about where I worked with our Quality Assurance group to overcome a problem where a key raw material would not be available for a manufacturing run.

2^nd PEI: This round started with a discussion of why consulting. Why this location? If I could run a manufacturing plant now, what things would I change to reduce costs or uncertainty? Tell me about a time where you faced a challenge?

2^nd PEI Response

On why consulting, I discussed business skills and impact, and gave personal stories on how I have been motivated to pursue consulting.

I discussed the work type and reduced travel time that this location would generate.

On running the plant, I focused on creating multi-functional project teams that are responsible for projects and not protecting functional groups, and create incentives to increase efficiency overall, not just within a functional group. I realized later that I should have broken down this response into fixed and variable costs first to show structure and then offer my solutions.

On the challenge question, I discussed leading a team of 2 people to implement a new data recording system, but had a low adoption rate. I thereafter focused the response on convincing two directors to adopt the system, which led to a higher adoption rate.

3^rd PEI: This final PEI discussion began with some highlights of my career. How do I help people with financial planning and asset allocation? Tell me about a time you worked in a team setting, with conflict that you solved?

3^rd PEI Response

Highlights include reducing the manufacturing records prep time from 3 months to 2 weeks and leading a team to execute a manufacturing campaign that reduce errors by 80%.

In financial planning, my focus was on first setting goals, setting a budget to meet those goals, and follow up to adjust the budget. Then I discussed my philosophy on asset allocation, which is to be in 90% stocks and 10% bonds for my peers, and the 90% stocks should be in index funds with 60% international and 40% domestic.

Then I discussed how some 401K’s have poor mutual fund choices.

The team challenge I discussed involved one person not adopting the new documentation process fast enough and found a work around to have the person do the work, but another person to focus on the documentation portion.

1^st Case

It was a straightforward case on improving the profitability of retail gas stations.

What are major revenue streams?

What are major fixed and variable costs?

What do you think margins are for gas?

Calculate the overall profitability of one store and what is the profit margin as a percent of revenue?

How do you increase sales in the retail stores?

1^st Case Response

I discussed the 3 areas to begin the case.

Revenue: Gas, retail stores, service, car wash.

Fixed costs:  land, building, maintenance, labor.

Variable costs: Retail COGS, Gas COGS, Gas Taxes, and Money transaction fees (cash or credit).

Margins for gas is close to 5% or even lower. Profit calculation was straightforward. Increase sales by 4P’s with a focus on Product Mix, Price, and Promotion. However, there was still the problem of getting the customer inside the store, so I responded with the need to a need or desire while the customer is pumping gas through advertising.

Afterwards, I probably could have added locating high margin products right to the pump so the customer can browse while pumping gas.

2^nd Case: 

This was another transport type of case, but focused on aviation.

What areas would you explore to increase volume going through the airplane hub that shipped goods?

Explain how switching to an electronic system and standardized process will increase efficiency?

Calculate the dwell time? This is how long cargo sits in a parking lot before being loaded on the airplane and shipped to another destination.

2^nd Case Response

Broke the key areas into three parts:

Inbound Units

Reorganization of Units

Outbound units

I provided ideas on each of those areas. The interviewer liked my thoughts on the electronic systems and standardizing process and asked for how that would increase the efficiency. I responded that an electronic system could group together units going to the same final destination and schedule the workers to reduce downtime. Then when calculating the dwell time, it took me a few minutes to even come up with an equation and even then it was the wrong equation. The interview gave me a hint to think about the actual units processed vs the space available. So the final equation was:

Space available: (# of Unit parking spots)*(% of parking spots actually utilized)*(# days in a week) /

Actual units processed: (# of units processed in a week)

Dwell = Space available / Actual Units processed

I was confused by what it meant for the % of parking spots utilized and why that would be included. Why wouldn’t all the parking spots be use?

So in thinking about that, I couldn’t figure out the relationship right away and this slowed me down a lot. I was also slow in doing the math, as I was still thinking about what the space available actually meant.

I did get all the correct answers, but it took too long.

3^rd Case

Client makes Cranes and sales have been slowing down while prices have been dropping. You have 5 minutes before you will meet with the CEO, what areas would you want to discuss with him?

Here is some additional information. The growth for Cranes is 5%. New Cranes are 20% more efficient. Cranes have a lifespan of 8 years.

What is the actual growth rate for Cranes? What should you do to respond? Would you want to run this business?

3^rd Case Response

I started the case by exploring three areas.

Market.

Product.

Competition.

Most likely area is the Market since the field has already been saturated with Cranes and all the customers that want them already have them and only replacements are being performed. Data needed to test this would be the total potential customers and % that have Cranes.

I struggled to calculate the growth rate because I thought I needed more information than what I had:

Current Crane usage

How much can cranes actually do?

Current mix of old cranes

Current mix new cranes.

However I didn’t verbalize what I had and how to use it, and just said I’m stuck because it looks like I need more information.

The interviewer gave me the hint to start with 100 cranes. Thus 5 new cranes are needed a year and 12.5 cranes are replaced a year with new cranes for a total of 17.5 cranes. The new cranes are 20% more efficient; so 12.5 new cranes actually replace 15 old cranes. Thus, 2.5 cranes will not be bought due to the efficiency of new cranes and the actual growth rate is 5%-2.5% = 2.5%.

In order to respond, we need to take market share through a combination of the Product Mix, Price, and Promotion.

I would still run this business as we have Tractors, Bulldozer, Excavators, etc. So we could find a way to leverage all of these products to create a strong brand in construction, to overcome the slow growth in Cranes.

Feedback I received:

PEI

Need to show different styles of leadership that you had to change yourself so you can get people to follow

Need to show where you actively changed someone’s behavior

The example you gave where you faced an issue with someone not performing, you  need to change his behavior, not find a workaround so that he can still behave that way.

Cases

Foundation is there, just more practice.

Need to be more structured and communicate your thinking crisply.

Need to be more broad in thinking (ex, how to increase volume through airplane hub is not only operations. There are also strategic ways to do this. Examples include expanding the hub, acquisitions, buying more airplanes, etc.)

Need to remember the overall goal when working through the problem. (e.g., in the airplane hub  analysis, recommendation to shut down inefficient parking lots so the other parking lots become more efficient would go against the overall goal of increasing volume through the airplane hub)

My thoughts on the experience

PEI

Of the 5 stories I gave over the different rounds, only one showed where I did not actively change someone’s behavior. I gave this story to show different types of leadership and where sometimes you can’t change everyone’s behavior, but you still find a good solution.

However, consulting firms are outsiders when they come in to help, thus they have to rely on changing behaviors as the consultants ultimately can’t just do the work themselves. Thus I recommend that all stories be about changing behavior stories. Even if you have to reuse stories from the 1^st round, it is better to reuse stories than to show weaker stories.

Essentially, they focused on the one story that did not meet their definition of fit and that failed me.

Case

I misinterpreted the airplane case as an operations case, so I missed the business ways to increase volume. So the structures should focus on both strategic and operational ways to increase volume. Not just how do you increase the efficiency of the hub.

Being more structured is sometimes difficult when you are given a question that has an obvious answer: you want to blurt out the answer. Yet it’s better to show that you’re always thinking broadly. Although I was structured at the start of the cases, I need to keep it up throughout the case.

Delivery is something that I will just need practice. If I am able to take time after each question, I am good at the delivery, but in the final round, I rarely took time and it hurt me and I wasn’t as structured nor could I deliver it crisply. So I must practice delivering the same quality response without taking time after each question.

As for remembering the overall case objective, this is something that must always be kept in mind. It’s typically easy when the case is improving profitability or entering a market, but for more complex cases such as those given in the final round, it’s best to take time to really understand the problem. In this example, I noticed that the parking lots are not used at 100% capacity, so I thought it would be good to shut down one parking lot to increase efficiency. However, shutting down one parking lot will not increase overall capacity. The correct answer is to figure out what is causing the long dwell time and decrease that.

Comments from Michael 

Thank you to this client for sharing his experiences so soon after this interviews. Writing them down forces one to critically reflect on the interviews and will certainly help when she interviews at the next firm.

We want to highlight and explain a few important lessons.

We always stress that consulting firms, McKinsey, BCG and Bain anyway, have only one definition of leadership.

They always want to see you facing an obstacle to achieve a major goal.

That obstacle must be someone disagreeing with you.

The obstacle cannot be anything inanimate like a software glitch or code.

You must go into excessive detail on how you changed the person’s mind.

You must not have alienated the person. Period.

That is it in PEI. No one matter what a firm asks you in the PEI, or fit cases, this is what they seek.

Giving feedback on 2^nd order information about cases is always difficult. We were not there to observe what happened and have to rely on the client’s feedback. That said, lets look at some obvious lessons.

Too many pauses or long pauses never help you. We generally do not like pauses as partners even when candidates ask for this right at the start of the case. The trick is to learn to speak out aloud as your thinking. This avoids the need for awkward pauses.

It also forces you to engage the interviewer in real time. If you pause, think and provide your answer, you have a 50% chance of being right and 50% chance of being wrong.

Now, if you think out aloud, the interviewer can hear your ideas and will respond to guide you before you are wrong. No interviewer will deliberately let you go down the wrong path. In this way, you have no chance of being wrong since you are thinking with the interviewer.

Lets also mention some insights on the case data. In a case interview, information is coming from three areas.

At first, all the case information resides in the early description of the case that the interviewer presents to you.

As the case progresses, the interviewer offers you more clues. This is the second source of information.

As you get more comfortable with the case, you will generate more insights, inferences and hypotheses. This is the third source of data in a case.

As you can see, since there are three sources of data, you need them all to solve the case. If you work quietly just using the first source, you will miss out on the additional clues from the interviewer.

This is what most candidates do. They are given the case and try to come out with an answer before the case even begins.

Should you get a lot of data, certainly go ahead and generate structured hypotheses. For those of you who do not know this, structured means having a decision tree and building the hypotheses of the prioritized branches of the decision tree.

However, think carefully, because in some cases you just do not have any information to generate hypotheses. In these cases you need to work much more with the interviewer to get some back information before building the case.

All of this is covered in great detail TCO 1 and 2. Pay careful attention to Felix’s sessions since all 23 are useful. Everything about cases is covered in those sessions and answer videos. Felix did most of her cases in the BCG style while Kevin Coyne in Season 2 does all his cases in the McKinsey style. Moreover, he does final round cases where frameworks cannot be used.

If you are interviewing in the Middle East we would also recommend Sanjeev in Season 1.

Also watch the videos on closed list dinners, PEI etc. They work and cover all the lessons this client will need to know for her BCG interviews.

Finally, of you find all of this use, please visit us on iTunes to download our podcasts and rate us. The ratings and comments help us understand what podcasts and articles to produce.

On a final note, remember this. You do not need luck if you prepare intelligently.

Michael

Image is from Emmanuel Huybrechts under cc.